A business owned by Auckland's wealthy Friedlander family is taking action over compensation offered for covenants on properties needed for the $4.4 billion City Rail Link.
The spectre of tunnel collapses, fires and disasters in New Zealand and overseas tunnels was raised in that action.
The Friedlanders' Samson Corporation and Tedcastle Estates sought a preliminary decision from the Land Valuation Tribunal over valuers' evidence in the case it is bringing against Auckland Council.
A more substantive hearing is yet to proceed.
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Sean Sweeney, City Rail Link chief executive, today told the Herald the decision addressed a pre-hearing preliminary matter about potential witnesses and was about subterranean land for the project.
"CRL says $39,000 in compensation has already been paid and Samson Corporation was now exercising an option under agreement to pursue additional compensation. CRL does not believe that the decision on this preliminary matter will materially impact the future hearing. The tribunal has not yet set a date for the hearing," Sweeney said.
The claim would have no impact on the project timetable nor its overall project budget, Sweeney stressed.
At issue before the tribunal was the amount of money offered by the council for it putting covenants on the company properties on Symonds St to allow the tunnels to be legally dug beneath the Eden Terrace shops.
The council is buying land for the project which includes tunnelling under properties in the area to more than 30m, the tribunal decision out this month said.
As well as the tunnel purchases, the council is applying to put covenants on properties for its tunnel infrastructure.
It wants to buy an interest in the Samson and Tedcastle properties but the two sides can't reach an agreement about compensation.
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The council has so far paid the two companies $39,000 but those companies want far more and are seeking $215,000 for the detrimental effect on their properties, the decision out this month said.
Putting such covenants on the properties affect future redevelopment opportunities such as height and the ability to dig beneath the properties.
Addresses were not disclosed in the decision out last Monday.
But the tribunal did cite discussion before it of detrimental effects on properties when tunnels were created beneath them.
"There has been some experience in New Zealand with the collapse of underground tunnels, particularly around Waihi. What impact this may have on the psyche of an Auckland buyer is unknown," the decision said.
There would be difficulties in demonstrating comparability between Waihi and Auckland.
"Nevertheless, the prospect of comparability between Seattle, Melbourne and other places where significant effects have occurred may be different," the decision said, citing Chamonix which was subject to an inferno in a tunnel.
An earlier decision in the same matter, issued in January, said properties involved were at 195 and 197-199 Symonds St.
Another property owner told the Herald today that City Rail Link properties had been valued incorrectly and the current action had wider ramifications for property titles already settled.
The Samson/Tedcastle tribunal action could have an effect on the financial compensation issued to other land owners affected by this infrastructure project, that owner said.
He was watching for further tribunal decisions to be issued and to see who won.
The tribunal decision in January also alluded to other parties who might have a financial interest in the action.
"The claimant [Samson and Tedcastle] seeks a judicial conference in the first instance to address preliminary issues including the status of a Mr McKee, a consultant from Seattle who has assisted the council in their valuation approach to compensation.
"It also seeks that any conference be open for any third parties to attend, although those parties are not specified. This is apparently on the basis that many of the parties will similarly likely have claims before the tribunal in due course," the January decision said.
Comment was sought today from a Samson company executive but not provided.
The Friedlanders appeared on the NBR Richlist with a substantial fortune, owning many properties throughout Auckland. The value of the family's holdings has been estimated as being near $2b.
The family ranked as second-most-powerful privately held business in the Herald's property power list .
That said founder Sir Michael Friedlander has been a quiet but extremely powerful force in the Auckland property market for more than 70 years, forming Samson Corp in 1946.
Latterly, the company has been a huge architectural influence, creating landmarks including Ironbank on Auckland's Karangahape Rd, highly commended in the World Architectural Festival, Parnell's Geyser, which took Institute of Architects awards, Cumulus, which also won local awards and D72 on Dominion Rd.
Son Daniel Friedlander is Samson's chief executive and Marco Creemers is project director of sustainability and new developments.